Correlation Between CS BEARING and SM Entertainment
Can any of the company-specific risk be diversified away by investing in both CS BEARING and SM Entertainment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CS BEARING and SM Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CS BEARING CoLtd and SM Entertainment Co, you can compare the effects of market volatilities on CS BEARING and SM Entertainment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CS BEARING with a short position of SM Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CS BEARING and SM Entertainment.
Diversification Opportunities for CS BEARING and SM Entertainment
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 297090 and 041510 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CS BEARING CoLtd and SM Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Entertainment and CS BEARING is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CS BEARING CoLtd are associated (or correlated) with SM Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Entertainment has no effect on the direction of CS BEARING i.e., CS BEARING and SM Entertainment go up and down completely randomly.
Pair Corralation between CS BEARING and SM Entertainment
Assuming the 90 days trading horizon CS BEARING CoLtd is expected to under-perform the SM Entertainment. In addition to that, CS BEARING is 1.5 times more volatile than SM Entertainment Co. It trades about -0.12 of its total potential returns per unit of risk. SM Entertainment Co is currently generating about 0.01 per unit of volatility. If you would invest 8,550,000 in SM Entertainment Co on September 3, 2024 and sell it today you would lose (70,000) from holding SM Entertainment Co or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CS BEARING CoLtd vs. SM Entertainment Co
Performance |
| Timeline |
| CS BEARING CoLtd |
| SM Entertainment |
CS BEARING and SM Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CS BEARING and SM Entertainment
The main advantage of trading using opposite CS BEARING and SM Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CS BEARING position performs unexpectedly, SM Entertainment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SM Entertainment will offset losses from the drop in SM Entertainment's long position.| CS BEARING vs. SM Entertainment Co | CS BEARING vs. DC Media Co | CS BEARING vs. Chorokbaem Healthcare Co | CS BEARING vs. INFINITT Healthcare Co |
| SM Entertainment vs. Korea New Network | SM Entertainment vs. ICD Co | SM Entertainment vs. DYPNF CoLtd | SM Entertainment vs. Busan Industrial Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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